A Comparison of Various Ways to Buy a Home

Real estate is undoubtedly one of the best investments you can make. Whether it is for your own consumption or you are planning to make money from properties, you can definitely benefit from knowing about all the options. When buying a home, you have the option to pay for it via loan. So, if you don’t have enough cash and you can only afford 10-15% of the total contract price, you can try applying for a home mortgage, which is more popularly known as the “rent to own” scheme. To apply for it, you need to consider various options to find the most suitable one for you.

Here is a comparison of the various ways to buy a mortgaged home:

Lease Option vs. Lease Purchase

There are two ways to buy a rent-to-own home–lease options and lease purchase. Both have similarities and differences that you should be aware of. By knowing their similarities and differences, you can know the best option for you. You can also differentiate which option is which when a seller offers you a home mortgage. To start off, here are the similarities and differences.


Both the lease option and lease purchase require you to lease the property. This means that you have to rent the house for a certain period of time, depending on your agreement with the seller. Leasing the property is an indispensable element of renting a home with a mortgage. So, if you are not willing to rent it out before it becomes yours, then a rent-to-own scheme is not the proper alternative for you.

Another similarity between the two is that it requires you to pay a sum of money at the start of the lease. You will need to give an upfront down payment or advance payments for your rent, depending on your agreement.


In terms of differences, both schemes offer different results at the end of the lease. A lease option gives you the choice to totally purchase the property at the end of the term or leave it. A lease purchase mandates you to buy the property at the end of the lease term. In the first offer, you have the option to decide whether to push through the purchase or not, while the second one doesn’t give you an option.

The amount of the lease may be different as well. This will depend on your agreement with the seller. In a lease purchase, your lease might be the installment payments for the property already. If the house is big and expensive, you will pay a high monthly rent. In a lease option, you may only pay the usual rental price of the landlord and if you choose to purchase the property at the end of the lease term, you may need to pay a higher amount than a lease purchase. Again, the amount depends on your agreement with the seller.

A home mortgage is a good option for homebuyers who can’t afford to pay in full. Evaluate which option is the best for you between a lease option and a lease purchase. You can choose a lease option if you don’t want to get pressured or you can opt for the lease purchase to secure the property.

JAM Properties, LLC is a real estate solutions and investment company located in Orange County, CA.  Contact us and let us help you with your real estate needs.

Phone: 949-438-4343

Email: info@jampropertiesca.com

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